course

i've a bachelor's degree in chemical engineering from the university of

michigan

and i also worked as a process engineer and manager in my prior profession before

receiving my PHD from Emory university's Goizueta business

school

you can call me professor Krazinski doctor Krristianski or if you

prefer

you can call me professor k or dr k

this is the course introduction lecture for strategic management

first i'd like to welcome you to the course it's really an honor and a

privilege to work with you

we'll get to know each other a bit more over the coming weeks but for now i want

to give you a quick overview discourse

strategy is a bit different from the other courses in the curriculum

most of the other courses focus on individual pieces of the business

functional areas

like accounting marketing finance operations our information systems

in contrast this course is devoted to the entire business as a whole

by taking this holistic approach

will be asking the really big picture questions about how to run a business

such as

what determines the total corporate performance of an entire business

enterprise

why do some companies succeed

while, other companies fail

and what if anything

can managers actually do about it

i'd like to start by discussing what strategy is

one of the many functions that a good strategy can serve for a company is to be a

boundary marker

that defines what the company does, and more importantly

what it does not do

ideally a good strategy should restrict the company not to do and what it does

best

but rather to what it does better than any other company

which may be different from what it does best

now the whole idea of strategy is a down the marker really is the overall theme

for this course

so then in discourse we wanna think about strategy is a set of boundaries of

what the company www will and will not do

and these boundaries are defined by the answers to three very basic very

fundamental questions that i'll discuss one of the time

first

where we compete

to answer this question what we need is an attractive market opportunity

we're going to spend a lot of time discussing exactly what it is that makes

a market opportunity attractive but for now

the main point is that even if you have identified the world's most attractive

and most profitable market opportunity

it will be utterly useless to you if your company doesn't have the resources

required to serve that market needs better than your competitors

so that brings us to the second question

how do we compete

to answer this question we need resources in capabilities that able our

company to serve the market opportunity better than any other competitor

these resources could be tangible such as the diamond mine or not belittle

field

or intangibles such as skills trust ur company reputation

we are going to spend a lot of time discussing exactly what kinds of

resources and capabilities can give your company to sort of the damage

over competitors

but for now the main point is that the answers to these first two questions we

are to compete and how to compete

together these two answers constitute what we call strategy formulation

once you know where you're competing and how you're competing

you have formulated strategy

strategy formulation is not all there is to strategy

there's also strategy implementation

which is critical because even if you have the best formulated strategy in the

world

it's still would be i'd really useless to you if your company putting

implemented effectively

so that brings us to the third question

how we execute

in answering this third question we needed implementation plan for outlining

our people an organization with our strategy

this would include motivation incentives control systems organization leadership

and so forth

we're going to spend a lot of time discussing exactly how companies can

most effectively implement the strategies they have formulated

but for now i want to point out that implementation without formulation

is just as useless as formulation without implementation

if you happen to formulate a poor strategy and your answers to the first

two questions

but it makes no difference whatsoever how good your implementation plan is

as the old saying goes it makes no sense to do the wrong thing perfectly

and that's attracted a lot of companies fall into it

they wanna devoting a lot of time energy and money to doing the wrong thing

perfectly

and as a result they wind up not making any money because no matter how

perfectly they're doing it

they're still doing the wrong thing

so now i'm thinking about the overall theme of this course in taking a step

back

i'd like you to envision strategy as a three-legged stool

in order for the strategy stool the stand-up successfully in the face of

determined competition

all three legs must be firmly in place

a successful strategy requires first an attractive market opportunity

second of the resources and capabilities required to serve the needs and desires

about market better than competitors can

and third a well-coordinated implementation or execution

battle lines the people any organization with the strategy that you formulated

if even one of those three legs is massive and the store will follow

and the company may fail

now i want to show you

how the three legged strategy store maps to the content we will cover in the

course

this overall course roadmap is organized hierarchical e and we'll return do it

many times throughout the term

external analysis covers the tools and frameworks we need to identify our

market opportunity the first leg of the store

internal analysis covers the tools and frameworks we need to analyzed the

resources and capabilities we can utilize to seize the market opportunity

this is the second leg of the store

finally

strategy implementation covers the tools and frameworks we need to understand how

to successfully execute our strategy

this is the third leg of the store

this hierarchical road map for the course is included in the course

syllabus and we will refer back to it often

if you're ever confused about where we are in the course

or about how the current topic is connected to the overall scheme of the

course

and you can simply refer back to this road map

i have three basic educational objectives for this course

first i want you to learn and practice what we call diagnostic reasoning skills

which are quite different from analytical reasoning skills

analytical reasoning is what you use when you apply logic to find a solution

in an orderly systematic way

for example

analytical reasoning is what computer programmers use to locate bugs in their

programs

they systematically turn off one piece of the program at a time to tell the

problem disappears

that way they can figure out which severed team was misbehaving and focus

their efforts on repairing that sub routine

in contrast diagnostic reasoning is the sort of skill that you use when you

leave two-factor conclusions without having complete information

basically

diagnostic reasoning boils down to your ability to

hill in the gaps in information

in order to make accurate conclusions without having all of the facts

available

for example

diagnostic reasoning is what numbers assyrian doctor uses to identify the

root problem underlying cluster of apparently unrelated symptoms

unlike the computer programmer

the emergency room doctors simply does not have to luxury of taking a purely

analytical approach

the doctor can't wait for a million test to be run nor can she systematically

turn-off different organs to find the problem part of body

she must quickly diagnose the problem in the face of incomplete an imperfect

information using her diagnostic reasoning skills

the diagnosis must be right the first time and they are rarely second chances

most courses in the curriculum focus primarily on helping you develop

analytical reasoning skills in specific functional areas like accounting finance

operations for information systems

but this course is devoted primarily to helping you develop your diagnostic

reasoning skills

in my view that's the main deliverable of this course

if we accomplish nothing else in your intellectual development

i will consider our time together is being successful you can enhance your

ability to apply diagnostic reasoning

my second educational objective in this course is for you to practice and

improve your communication skills

that is communicating your diagnoses and recommendations in a persuasive and well

reasoned way

but communication is a two-way street

if we are going to improve your diagnostic reasoning skills we also need

to improve your ability to seek out ways to improve the quality of information

you using your judgments

bus we'll also practice listening to the very backgrounds and experiences from

classmates to refine our own thinking

my third and last educational objective in this course is for you to learn

understand and be able to apply an entire toolkit of conceptual frameworks

they can be used to frame an analyze the relevant issues in any strategic

situation

while you may think initially that these tools and frameworks are only useful to

analyze for-profit organizations

you'll quickly see how they help you in many aspects of life

well these tools were designed to analyze companies

they're really about understanding situations when resources are scarce and

performance matters

we will talk more about how these tools apply

tamo will demands of life

so if these are the overall course objectives that i want to take a moment

to show you how the assignments and activities of the course fit in

first of all

if one of our main jobs is to prepare you to deal with ambiguous and perfect

information and make sense of it

we need to slowly pushing out of the classroom towards a more complex world

this continuum shows a very well-defined and perfect world on one end very much

like our typical classroom environment where problems and solutions are very

clearly defined

and a world full of complexity and ambiguity on the other and

very much like the real world most managers with them every day

first of all

you will have an opportunity to read articles in view lectures that i hope

you understand the main strategy frameworks

you'll find it these frameworks have some strengths like their simplicity

but also have many weaknesses because they can't fully account for the

complexity of the real world

that's their only tools to help you solve problems

not solutions in and of themselves

you will find that these tools make the most sense and very tightly controlled

classroom environments

second

after giving you conceptual tools and frameworks through articles and lectures

you will have an opportunity to engage with real business cases

these cases are very controlled because you were given a great deal of

information and a very concise package

the cases are also static

that is they deal with the business scenario at a point in time

however they also add significant complexity

some information may be missing

well either information provided maybe irrelevant

the frameworks will likely help you analyze the case

but they may not apply perfectly to the cases you analyze

as you're a case reports

and or come to class prepared to intelligently discuss your analysis of

the case

you'll increase your ability to make sense of a complex world

and drive to the heart of the critical issues

in other words these cases will help you take one step closer

to the real world

in addition to the cases articles and lectures you-all also participate in a

business simulation

as part of the simulation u_n_ a team of other students will develop and

implement a strategy

forcing related file

you will compete with teams made up of your classmates

well the simulation is still a very tightly controlled environment